7/20/2021 Financial News: China Evergrande Dives As Property Sector Worries Deepen; Shanghai Second-hand Housing Starts Price Verification

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1.China Evergrande dives as property sector worries deepen

Shares and bonds in China Evergrande, the country’s most indebted developer, plunged on Monday after news a Chinese court had frozen one of its bank accounts deepened concern over the impact of Beijing’s deleveraging drive. A court in the eastern city of Wuxi this month ordered a freeze on a 132 million yuan ($20.37 million) bank deposit held by Evergrande and a unit at the request of China Guangfa Bank Co, a court filing on a Chinese corporate information app showed.

Evergrande said the loan was not due until March and that it planned to take legal action against the lender. Evergrande’s Hong Kong-listed shares fell 16% to a fresh four-year low, and its bonds also plunged, in onshore and offshore markets. Pessimism appears to be spreading to the broader sector. Communist China’s real estate stock index fell 1.7%, pushing the sector’s valuation further below book value.

2.Shanghai second-hand housing starts price verification

July 19 is the deadline for verification of the prices of listed second-hand houses in Shanghai’s leading real estate brokerage agencies. According to the previous flow chart of a real estate agency, as of 9 o’clock this morning, if high-priced properties have not been removed from the external network, the system will uniformly remove the external network. A reporter from the Securities Times visited the intermediary app at 10 a.m. and found that there are currently about 16,000 second-hand housing listings on the market. On the day when Shanghai announced the inspection of second-hand housing prices, the app showed about 32,000 listings. Roughly estimated, the agency has removed about 16,000 from second-hand housing list.

3.CCP orders power plants to build 7-day coal inventories

Communist China’s state planner has ordered power plants to build their coal inventory to the equivalent of at least seven days of consumption by July 21, three sources with knowledge of the matter told Reuters on Monday.The order came as the government strives to ensure electricity generation at coal-fired power plants amid surging power consumption from industrial and residential users.

The NDRC has already announced it will release more than 10 million tonnes of coal from reserves to cool the market while adding more coal production capacity in the country. Average daily coal consumption had risen to more than 2.2 million tonnes at key power plants in eight provinces in eastern Communist China as of July 15, the highest level in the corresponding period in history, according to data compiled by China Coal Transportation and Distribution Association (CCTD). Meanwhile, coal inventory at the power plants fell to 24.2 million tonnes, the lowest level in the same period.

4.People’s Bank of China: Support Shanghai to further improve the financial market system and strengthen the allocation function of global financial resources

Today, the State Council Information Office held a press conference to introduce the relevant situation of supporting the Pudong New Area’s high-level reform and opening up and building a leading area for socialist modernization. In response to questions from reporters on measures to promote the two-way opening of financial markets and the two-way flow of cross-border RMB funds, Wang Xin, Director of the Research Bureau of the People’s Bank of China, said that in recent years, my country has continued to follow the principles of marketization, rule of law, and internationalization. Promoting the opening up of finance has been mainly manifested in several aspects in the near future: First, continue to promote the high-level opening up of the bond market, stock market, foreign exchange market, commodity futures market, and financial derivatives market. The second is to remove restrictions on the proportion of foreign shares held in banks, securities, funds, futures, and personal insurance. The third is to liberalize access restrictions in areas such as corporate credit investigation, rating, and payment.

5.Communist China’s Ministry of Industry and Information Technology: There are still 145 apps that have not been corrected, including Douyin Speedy Edition, Huya Live, etc. 

The Ministry of Industry and Information Technology of China said on Monday that it has recently conducted special inspections on mobile phone applications such as medical and health, e-commerce, and utility tools, and has notified relevant companies to make rectifications; Up to now, 71 apps have not yet been rectified, including Douyin Super Speed, Huya Live, and CaoCao Mobility. The notice published on the website also pointed out that the communications administrations are also actively carrying out mobile phone application software supervision and inspection. The communications administrations of Liaoning Province, Zhejiang Province, Guangdong Province, Sichuan Province, and Ningxia Hui Autonomous Region have found that 74 APPs have not been rectified. If the rectification is not completed within the time limit before July 26, the ministry will organize and carry out relevant disposal work in accordance with laws and regulations.

6.The export volume of rare earths in a single month increased by 50% year-on-year

According to data from the General Administration of Customs on July 18: In June 2021, Communist China’s rare earth exports reached 9,071 tons, a year-on-year increase of 49.4% compared to 2020. As of June 2021, Communist China’s export volume of rare earths reached 51,602 tons, a year-on-year increase of 144.38% compared with the export volume of 21,115 tons in 2020. The export value was 2.027 billion yuan, a year-on-year increase of 75.5%. The agency said that the current inventory of praseodymium oxide and neodymium oxide has been at a historical low in 18 years, and the demand for replenishment is strong. The production side of Myanmar is entering the rainy season, and production is entering a seasonal low. However, due to stricter inspections of environmental protection technologies, some domestic enterprises are under pressure to increase production in the short term.

Under this situation, Southern Rare Earth Group yesterday announced the latest rare earth oxide listing guide price, of which the guide price of terbium oxide was 7.2 million yuan/ton-7.3 million yuan/ton, an increase of 600,000 yuan/ton from the guide price last week. The guide price of dysprosium oxide reported 2.55 million yuan/ton -2.6 million yuan/ton, an increase of 130,000 yuan/ton from last week’s guide price.

7.Communist China’s new carbon emissions scheme is big, but ineffective

Communist China’s national carbon emissions trading scheme has launched amid fanfare that it will be the biggest market of its kind in the world. Should we believe, or beware the hype? On the surface, the new and much-delayed system looks impressive, covering some 2,000 power plants responsible for more than 4 billion tonnes of carbon emissions. And this is only the first phase of the scheme. Other industries are scheduled to be included at yet-to-be determined intervals, such as petrochemicals, steel, paper-making and aviation. But while the system may appear vaguely similar to that of the European Union, the current global leader for emissions trading, it is actually quite different – and it may do little to reduce Communist China’s carbon pollution, at least in the short to medium term.

8.Pig prices fall, some companies have a half-year loss of 3 billion

Recently, the 2021 semi-annual report performance forecasts of listed pig companies have been released one after another. Muyuan Foods, Zhengbang Technology, New Hope, and Wens Foodstuff “Four Big Pig Companies” reported in the mid-year report forecast to show “three losses and one fall”. Other smaller pig companies such as Aonong Biological Technology, etc., the forecast in the interim report is also not optimistic.

The New Hope performance forecast stated that the net profit loss attributable to shareholders of listed companies in the interim report is expected to be 2.95 billion yuan to 3.45 billion yuan. Compared with last year’s turn from profit to loss, the loss is also the largest among the “big four pig companies”; Wen’s shares and Zhengbang Technology are expected to lose 2.26 billion yuan to 2.56 billion yuan and 1.2 billion yuan to 1.45 billion yuan respectively, and the two companies have also turned losses; Among the four companies, only Muyuan shares are profitable, but it is expected to decline year-on-year. Smaller companies such as Aonong Biological Technology and Zhenghong Science and Technology have also experienced losses or performance declines.

By【G Translators- Financial Team】
Author: Tracy

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